3.4 Nearly half of all submissions received in the consultation phase of the review addressed the issue of how often the CPI should be released. Within the AG, there was also keen interest and debate on the periodicity issue. The interest in the compilation frequency of the CPI contrasted with that of the last major review in 1998, where this topic attracted very little public comment.
3.5 Demand for a monthly CPI was strongest from organisations with an interest in economic measurement and analysis or the financial sector. Submissions from this group commented that having access to a greater quantity of data in a more timely manner will enable users to identify trends and make informed decisions.
3.6 In particular, the CPI has a central role in the Reserve Bank of Australia's (RBA) monetary policy development. In the RBA's submission to the review it was noted that, " ... in Australia, only four readings of the CPI are released each year, versus twelve in almost all comparable economies. More timely data would help provide an earlier indication of the trend in inflation, which is particularly important around turning points. It could also be helpful in distinguishing between signal and noise" (Reserve Bank of Australia, 2010).
3.7 Organisations more concerned with the CPI for assessing social welfare or indexing contracts were not explicitly opposed to a monthly CPI, but confirmed that a quarterly CPI was adequate for their current needs.
3.8 Some users expressed concern that monthly seasonal factors may increase the volatility or 'noise' reported in the CPI. The ABS is unable to test the validity of this claim without the monthly data. Seasonal adjustment of the CPI is discussed in Chapter 6.
3.9 There was a clear message from all users of CPI data that the ABS should only consider a monthly CPI if the quality of the index will not be compromised.
3.10 Users noted that the emergence of private sector monthly inflation gauges indicated a demand for a monthly CPI. However this was not seen as a substitute for an official monthly measure.